Residential Secure Income Plc · LSE:RESI
Residential Secure Income — FY2024 Earnings Presentation
25 slides from Residential Secure Income's earnings presentation, January 2025
Slide 1: Residential Secure Income plc (ReSI) FY 2024 results presentation
Residential Secure Income plc (ReSI) FY 2024 results presentation January 2025 For professional investors only. Capital at risk.
Slide 2: Important legal notice
Important legal notice This presentation (the Presentation) is issued on a confidential basis by Gresham House for No representation is being made that any investment will or is likely to achieve profits or losses similar information purposes only. This Presentation, its contents and any information
Slide 3: Presentation team
Presentation team Mike Adams Ben Fry Sandeep Patel Chairman, Lead Finance Real Estate Fund Manager Director 3
Slide 4: Overview
Overview
Slide 5: Underserved markets in a changing environment
Underserved markets in a changing environment Focused on two resilient sectors of affordable housing1 with inflation-linked income2 Independent Retirement Living (IRL) 1807 Jul-2017: ReSI plc IPO (£180mn market cap) ▪ UK’s largest private rent portfolio4 36% ▪ Maintaining independent living (without
Slide 6: Challenging market backdrop
Challenging market backdrop After a review of strategic options, a managed realisation strategy to maximise shareholder value was proposed with 99.7% of shareholders voting in favour Market backdrop Liquidity (1) ▪ ReSI share price trading at an entrenched prevailing discount to its net ▪ 0.13% Dail
Slide 7: Managed wind down: progress to date and next steps
Managed wind down: progress to date and next steps Activity to date Current position Future Direction Challenging macroeconomic backdrop for Real Formal change to Investment Policy approved Estate Investment Trusts Sales process launch Estimated timings for full wind-down of 12-24 months subject to
Slide 8: Managed wind down: strategic considerations
Managed wind down: strategic considerations Drive earnings growth and advance realisation in an orderly manner, balancing timing and shareholder return 0.05 ▪ Key pricing reference rates have entered a period of high volatility following 10 Year Gilt adverse movements since announcement of wind down
Slide 9: FY 24 portfolio overview & performance
FY 24 portfolio overview & performance
Slide 10: FY 2024 key metrics
FY 2024 key metrics +5.8% 96% >99% +9% 124% Like-for-like Record Retirement Rent collection EPRA Adjusted Dividend rent growth1 occupancy continuing2 Earnings growth coverage -3.4% -3.7% / 74.6p 100% / 20 years Like-for-like 52% FY 2024 total return / fixed or inflation-linked debt for valuation Loa
Slide 11: Strategic initiatives
Strategic initiatives ▪ Local Authority portfolio disposal now complete: ─ One asset sold on 4 April 2024 for net £5.6mn, ahead of £5.5mn Sept 2023 book value ─ Remaining asset sold on 10 January 2025 for net £15.0mn, ahead of £14.4mn Sept 2023 book value ─ Proceeds used to fully repay drawn revolvi
Slide 12: Retirement portfolio performance
Retirement portfolio performance Top-line growth FY 2024 key metrics Homes / Value 2,224 / £198mn ▪ 8.4% rental revenue growth Occupancy 96%2 ▪ 4.8% like-for-like rent growth1 ▪ 96% occupancy2, up from 94% FY 2023 Like-for-like rent growth +4.8% ▪ 99% rent collection2 Margin (excl. ground rent)3 53%
Slide 13: Shared Ownership portfolio performance
Shared Ownership portfolio performance Strong demand FY 2024 key metrics Homes / Value 751 / £112mn ▪ Fully occupied and income generating Occupancy 100% ▪ Elevated mortgage rates and private rents fuelling demand Like-for-like rent increases +8.8% Secure income Margin 94% Unlevered net initial yiel
Slide 14: Sustainable investment highlights
Sustainable investment highlights Social impact Environmental impact Customer surveys: Retirement Monthly saving on energy ReSI Housing2 £58 | 200kg CO2 bills and carbon emission for shared ownership residents4 75% Happy or not dissatisfied with 89% Happy or not dissatisfied with ReSI’s in-house the
Slide 15: FY 2024 Financial Results
FY 2024 Financial Results
Slide 16: FY 2024 income
FY 2024 income Top-line rent growth and stabilisation of costs delivering +9% Adjusted EPRA Earnings growth and 124% Dividend Coverage FY 2024 FY 2023 Change Net rental income (£mn) 25.0 Gross rental income £29.9mn £27.9mn +7% Net rental income1 £18.9mn £18.1mn +5% 20.0 1.0 0.7 0.4 0.1 18.9 18.1 -1.
Slide 17: Adjusted EPRA Earnings
Adjusted EPRA Earnings 7.0p Movement in adjusted EPRA Earnings (pence per share) FY 2024 dividend cover: 124% 6.0p FY 2023 0.4p Full coverage via: dividend: 5.16p 0.6p 0.3p 5.1p 5.0p 0.3p ▪ Inflation linked rental growth 0.5p 4.8p 4.7p (0.8p) (0.2p) (0.1p) ▪ Active void management 4.0p (0.8p) ▪ Reba
Slide 18: European Real Estate Association Net Tangible Assets (EPRA NTA)
European Real Estate Association Net Tangible Assets (EPRA NTA) FY 2024 movement in NTA (pence per share) FY 2024 total return: (3.1)p (6.8)p share valuation change 95.0 7.5 90.0 ▪ £9.5mn/5.1p net income 5.1 ─ 124% dividend cover 85.0 81.8 -4.1 ▪ 6.8p valuation decline 80.0 ─ 3% like-for-like valuat
Slide 19: RESI debt stack
RESI debt stack 20 years1 51%1 41%1 52% 43%2 Average debt maturity Fixed (3.5% coupon) Inflation linked (5.5% cap) LTV (50% target) Reversionary LTV (1.1% coupon) ▪ 92% fixed / inflation-linked debt for a weighted average of 20 c.82 20 years1 ▪ Amortisation of debt reliant on staircasing 15 ▪ USS fa
Slide 20: ReSI key debt metrics
ReSI key debt metrics ReSI has ample room in debt covenants Loan covenants by portfolio1 Total portfolio / ▪ £15mn repayment of RCF2 in January, Retirement / Scottish Santander Covenant Shared Ownership / USS Widows Revolving Capital LTV on RCF reduced to 0% Facility £73mn (book / fair value) / £93m
Slide 21: Summary
Summary
Slide 22: Summary
Summary Managed wind-down commencing from position of improved underlying performance and against dynamic market backdrop Current Position Market Backdrop Next Steps ▪ Continued focus on: ✓ Local Authority portfolio fully exited ✓ Investment landscape within UK simplifying capital structure Living r
Slide 23: Q&A
Q&A
Slide 24: Appendices
Appendices
Slide 25: Portfolio: valuation and returns
Portfolio: valuation and returns High-quality, affordable homes generating positive outcomes for residents Retirement Shared ownership Total1 Homes / Value 2,224 / £198mn2 751 / £112mn2 2,975/ £311mn2 Homechase House, Southport Unlevered net initial yield3 6.1% 4.1% 5.3% Levered net initial yield4 8
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